I think that the reason why people wouldn't pay $1 per month is mostly because of inconvenience. If people had to pay for Facebook as part of their income tax (which amounted to about $12 per year), then I think a lot of people would be OK with that and everyone would be better off overall.

The problem is that the force of marketing is invisible. Even people who are resistant to targeted advertising are at least susceptible to indirect advertising through peer pressure from their friends... If all your friends do something, you will probably start doing it too - Or else, over time, they might stop being friends with you.

I don't use Facebook much and so I rarely see their ads but I can clearly feel the effects of Facebook's advertising in my life through my personal and professional relationships.